How relevant is TV as an advertising medium for FMCG/CPG marketers (brand managers)?




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This is a Quora question I was asked to answer.

Absolutely yes, but I need to qualify my answer with more details to back that up.

First, my focus is building consumer product startups, not managing large brands. So, I really have no clue if brand advertising is relevant or not because I have almost no experience doing it.

Second, to effectively use TV as a startup, you need a “WOW” product that captures attention.

Third, you need to use direct response advertising, not traditional brand advertising.

Direct response simple puts a call to action in the ad to get a customer to respond immediately.

Whereas brand advertising relies more on impressions to stay top of mind with a consumer.

With direct response, you are in a position to capture metrics fairly quickly on whether your ad is working or not, whereas with brand advertising, it typically takes months of spend to see if you start to get sales lift.

So, brand advertising can work, but you better have the cash and the time to wait out your spend before you start to see sales lift.

That is traditionally a luxury available only to large brands, not startups or low 8 to 9 figure companies.

So, if you are a consumer product startup, with a WOW product that captures attention, is analog advertising relevant? (note: I define national and pay TV, along with radio and print as analog advertising, versus digital advertising which is online.)

Absolutely.

But the trick is to optimize campaigns so that you have as high of a return on ad spend as possible (ROAS – gross sales divided by advertising spend).

To do this, you never want to lead with analog advertising out the gate. You want to use digital first to find out what works in your messaging – keywords, headlines, taglines, copy, landing pages and your conversion funnel (website and call center, if you do that).

It is cheap and fast to test a multitude of messages using digital and as you gain success and find out what works, you build your ad spend online first.

When you start to show strong ROAS via digital, and you can successfully ramp your spend across digital and you still have strong ROAS, then you can think about adapting the same messaging for analog.

Analog is far more expensive to test versus digital. You can start with as low as a few dollars a day for digital, but to test with analog, you need into the 5-figures to effectively test, not including creative development. You are much better off using digital to test your creative than analog.

What are some benchmark ROAS? For digital, it should be a few whole numbers above your breakeven ROAS. So, if your ROAS breakeven is 3, then you probably want to see a ROAS in digital of at least 5 (but really, 7+ is better).

In general, direct response analog traditionally does not have as strong a ROAS as digital, so if you roll out with analog, you might never get above a 4, which is why you test on digital first to confirm if your messaging can deliver a ratio of 7 or more.

I find that when you adhere to the above – WOW product, direct response advertising, with an optimized campaign delivering a positive ROAS, then nothing beats TV.

In this case, you can be a super small brand with a low 7-figure budget, but you can spend a lot in marketing – punching way above your weight – and achieve incredibly fast growth.

But you have to work up to it to find out if it will be relevant for your company.



I post what I see and do in consumer products. But I am just one person with my own perspective. I want your opinion and observations from your point of view. Please comment below so I and others can learn. Thank you!


About the Author:

I am a startup and growth company expert: sold 1, built 5, and crashed 2. I develop, launch and grow consumer products through uncommon methods that can lead to more sales – faster – and can make a company and its products more appealing to consumers and resellers, with less risk. More about me here.

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